With the arrival of 2010, now is probably a good time to plan your finances for the rest of the year. However, being able to effectively manage your finances is not something that many people are good at. Often we find that it is quite the opposite, our finances are managing us. So what’s the answer?

There are some timeless rules that apply to managing your finances. These are not the only rules that you should follow, but they are certainly worth some thought.

1. Manage your Debt
Credit card debt should always been paid off first as it incurs much higher interest than other loans. Searching the market is your best option for reducing the amount of debt that you have. By researching different outlets for credit cards you can lower the amount of interest that you have to pay. Another thing to consider is consolidating your overall debt to reduce interest payments. It is important to be careful when consolidating your debts with a mortgage as a long term debt at a lower rate can be as harmful as short term debt at a higher rate. It all needs to be managed carefully.

2. Limiting you credit limits
Once you have controlled you credit card debt it is a good idea to reduce the amount of credit that you have. By reducing your credit limit you are eliminating the temptation to use this credit. In saying this, make sure you leave your credit limit at a level that is sufficient for what you need.

3. Manage your costs
Limiting transactions is a simple way of managing your money. For example instead of visiting an ATM get cash out when you are buying your weekly groceries. Using EFTPOS is cheaper than most ATM fees. Generally most banks will waive the fees if you hold a mortgage with them. If you do not have a mortgage ensure that the fees you are paying are as low as possible. Another thing to consider is an online savings account as they offer high interest and are also fee-free.

4. Finding your lost super and consolidating your superannuation funds.
Multiple funds have multiple fees that could be eating away at your super. By finding out if you have lost super and rolling it over into one account you will save yourself the cost of fees and will be able to accumulate your super faster.

5. Get your pay before the taxman
Salary packaging involves taking part of your regular income before tax and using it to contribute to your superannuation, the remainder of your income after these payments is then taxed. It will depend on what your employer will allow. For example, if you earn $1,000 a week and you are taxed at an overall rate of 10%, the income tax payable on that is $100. But if you salary sacrificed $250 of your $1,000, your taxable income falls to $750 and so the tax you pay falls to $75, a saving of $25. Be aware that there may be fringe benefits tax payable on some of these salary sacrificing arrangements.

By considering these points it is easier to manage your finances and hopefully make a saving. The accountants at the Quinn Group are able to help you manage your finances and put in place ways to minimize your tax.  For more information on managing your finances, contact us on 1300 QUINN or click here to submit and online enquiry.